5/4 (Sat.) The Deficit Myth and Modern Monetary Theory (Host: Iris)

[Iris Wu]

When working on our personal finances or family’s financial planning, we typically ensure that inflow exceeds outflow. Should a country’s fiscal budget adhere to the same principles of discipline?

Modern Monetary Theory (MMT), a macroeconomic framework, challenges traditional economic principles by asserting that governments with currency sovereignty will never run out of money. These governments do not need to worry about national debt and should issue currency as needed to meet social development goals. Are you convinced by the claims of MMT?

What is the core value of MMT, and what issues does it intend to address? What impact might it have on global economics? Will it secure a place in mainstream economic trends?

Reference Materials:
• Stephanie Kelton: The big myth of government deficits | TED • (Optional) Modern Monetary Theory, Explained
https://www.vox.com/future-perfect/2019 ... -explained

Discussion Questions:
Session I: What is MMT?
Q1: The speaker said that governments often use the deficit as a reason to curtail funding for social welfare programs, but they never hesitate to expand the defense budget or bail out banks. Do you agree with this observation? Is deficit a genuine problem for a country? How does high national debt impact the economy and your wallet?

Q2: When a country is first established, does the government begin by collecting taxes or by injecting money into the economy? Does the government fund the people, or is it the other way around? If you think it’s the other way around, where did the initial money come from?

Q3: MMT argues that a government with currency sovereignty should fully fund all social development programs without concern for national debt or deficits, as it can issue its own currency and will never run out of money. Do you agree with this assertion? Why or why not?

Session II: Critics and Opinions
Q4: While MMT has its obvious weaknesses, what mindset should we adopt to properly view and evaluate it? Please refer to the following Chinese article for context:
何宗武教授「現代貨幣理論的原理」
https://web.ntnu.edu.tw/~tsungwu/Rethin ... /MMT.html

Q5: What are the primary criticisms of MMT according to mainstream economists?

[Consider, but do not limit your response to, the following points:
• Lack of rigorous mathematical models, just theoretical talking points.
• Relying on an idealized, perfectly functional government.
• No assurance of productive capacity to match monetary expansion.
• Potential for currency devaluation in the global markets without corresponding increases in productivity.]

Q6: What do you think about Japan’s high national debt and the use of quantitative easing (QE) worldwide? Could they be considered forms of MMT implementation? Will MMT prevail over the current mainstream economic practices? Why or why not?

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Agenda:
3:45 ~ 4:00pm Greetings & Free Talk / Ordering Beverage or Meal / Getting Newcomer’s Information
4:00 ~ 4:10pm Opening Remarks / Newcomer’s Self-introduction / Grouping
(Session I)
4:10 ~ 4:50pm Discussion Session (40 mins)
4:50 ~ 5:10pm Summarization (20 mins)
5:10 ~ 5:15pm Regrouping / Instruction Giving / Taking a 10 Minutes Break (Intermission)
(Session II)
5:15 ~ 5:55pm Discussion Session (40 mins)
6:00 ~ 6:20pm Summarization (20 mins)
6:20 ~ 6:30pm Concluding Remarks / Announcements

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Meeting Date: As shown on the Subject Line
Meeting Time: 4:00pm – 6:30pm
Meeting Venue: 丹堤咖啡 Dante Coffee (Minimum Order $85)
Address: 台北市濟南路三段25號[MAP]-捷運忠孝新生站3號出口步行3分鐘

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[Rock]

There are reasons why some people are still unemployeed when there are job vacancies available in a society. One of them is that these are not good jobs so few people want to do it. If the government creates good job opportunities which are strongly finacially supported, then those not good jobs in private sectors would never be taken. It seems also like some kind of competition between the government and private companies, another kind of "與民爭利", although the government is not doing this for profit.

Come to think about it, what is a "good job" anyway?